besides reducing the agency costs of debt finance also greatly facilitate tacit collusion in product markets. Concentrated or …

- besides reducing the agency costs of debt finance also greatly facilitate tacit collusion in product markets. Concentrated or …

competition among suppliers. We explore the interaction between leverage and supplier competition, and find that firm leverage … decreases with the degree of competition among suppliers. Specifically, leverage decreases with the elasticity of substitution …

We show how product market competition affects capital structure by developing a tractable model that embeds the …, imperfectly competitive firms. Different determinants of competition—fixed production costs and product substitutability …—have contrasting implications for the effects of competition on firm leverage. Firms in more competitive industries with greater …

effects on product market competition. We test their model in a duopoly experiment under both, Bertrand and Cournot … competition. We find that leverage has strategic effects, but those effects are much weaker than predicted by theory. Specifically …, we find for price competition a general tendency towards collusion, which has the same overall consequences - but …

How do financial constraints influence innovative activities of firms? In a two-period model of price competition with … and might even become a monopolist in the second period of competition. If we finally assume that both firms are …

. In contrast to its advantageous commitment value in short-run competition, leverage reduces profits from infinite …